What are Employee Benefits? (Literally?)
The term “Employee Benefits” is the arrangement of advantage or rewards from employers who are at the top level to employees who are at the middle and/or lower level of organization. Employee benefits are perks given to employees other than their salary package either direct or indirect.
Benefits can be paid, non-paid or others. For every position the benefits offered are different which is also affected by your status of employment (full time or part time). Similarly, some employee benefits are mandatory by law and some vary from firm to firm or industry to industry. Employees in organizations can also be retained by giving them different/more employee benefits. Employee benefits play a pivotal role during hiring as they help in attracting employees. Benefits that majority of employees prefer but are not limited to are medical and dental coverage, time off from work, retirement plans and help from the company during times of crises.
Great, but why are employee benefits so important?
When designed, implemented and managed correctly, employee benefits enable you to support your employees while engaging them in your company values. Your employee benefits package provides employees with increased economic security and helps them feel individually valued by your company. In turn, employee benefits create advantages for your business as well. Ultimately, you will profit by investing in your employee benefits.
Another important thing that employee benefits provide you with is competitive advantage when it comes to recruiting new employees as well as retaining old ones. Specialized benefits based on each employees needs & wants are one way to go or you could focus on providing more of a general benefit that is highly desired to maximize the psychological value of your benefits program.
Could you provide me with a scenario?
Every employee wants to be at top in the mind of their manager but with the passage of time, their energy gets low and they start working slowly. We can take the example of an employee who starts coming late to work after working at the particular company for a year. The company decides to motivate & encourage him by giving him different benefits like casual leaves or a company trip. They can also start some motivational activity in the organization where different rewards are given to employees. In this way, they can retain employees in their company and employees will remain loyal to the company. This will also lead to efficiency in work and job satisfaction on both sides for both employer and employee.
Another important things to remember is that motivation comes in two forms.
One is intrinsic motivation – this refers to motivation where internal factors are involved such as: personal satisfaction, pleasure to do right things, and so on, it originates from the connection that is directly between the individual and the task performed. Other is extrinsic motivation – this refers to motivation where external factors are involved such as: higher salary, allowances, bonuses, etc. It is derived from the individual contact with the external environment of the task.
What kind of employee benefits should I focus on providing?
Its important to understand that there is no one benefit that fits everyone. The best way to find out what kind of benefits you should be providing next is by conducting an office survey where people are allowed to submit anonymous responses and then the most requested one should be chosen. It’s prudent to also remember that the requested benefit is within your means of budget as stretching yourself too thin will only make your life harder. Giving a benefit and taking it away later is much worse than not giving it at all.
If you are still unsure of what type of employee benefits to provide to your employees then the following statistics might help you gauge a better understanding:
- 55% of employees in a survey conducted by Clutch said that they value health insurance the most
- 18% of employees in a survey conducted by Clutch said that they value paid vacation time the most
- 11% of employees in a survey conducted by Clutch said that they value overtime pay the most
- 10% of employees in a survey conducted by Clutch said that they value retirement funding the most
Now its not necessary that providing new benefits to employees is always the right way to go. Sometimes its just worth asking them why are they unhappy, here are a few statistics showing various reasons why employees may be dissatisfied with that they currently have:
- They want more of a benefit they already have (57%)
- They want a benefit they don’t receive (24%)
- They can’t use their benefits (22%)
- They feel pressured not to use their benefits (8%)
- They don’t understand how to use their benefits (7%)